December 19, 2018
December 19, 2018
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Take That With A Grain Of Salt.
Seven Days Fair Game column this morning featured a piece on whether or not there could be a pension battle this year inside the State House.
Here’s an excerpt from the column:
[VSEA Executive Director Steve] Howard has evidence to support his fears. Scott is on the record advocating for a shift to defined contribution plans for newly hired employees. He hasn’t talked about it lately, but he promoted the idea after winning the governorship in 2016. "The most immediate and meaningful step to curb the state’s growing liability is to offer new State employees and teachers a defined contribution plan (similar to a 401k)," wrote the Scott transition team shortly after his election.
[Treasurer] Pearce was, and is, a staunch opponent of defined-contribution plans. She argued that the plans don’t actually save any money — and do nothing to address unfunded pension liabilities. Which, as we have seen, account for the bulk of Vermont’s pension difficulties.
"Defined benefit plans are a better deal for the employee and the taxpayer," said Pearce. "They are professionally managed and achieve economies of scale, thanks to their large asset pools." They also provide much better financial security for retirees, she added.
"We are not planning to propose defined contribution," asserted Young. "We want to work with the legislature and the treasurer to keep this from getting worse."
That word "planning" provides plenty of wiggle room. But if defined contribution is, indeed, off the table, it may be due to sheer political reality. House Speaker Mitzi Johnson (D-South Hero) expressed confidence that her caucus would stand behind the unions.
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